How Scottish self-determination matters

The events of the last week have made it very clear that Scottish independence would affect all of the UK. I have no vote in this referendum, but I definitely have an interest in its outcome.

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By Frances Coppola

My post about Scotland and the banks attracted an outbreak of criticism from fervent Scottish Nationalists. I found this rather bizarre, as throughout the post I assumed there would be a “Yes” vote in the September referendum. How this translates to “Coppola despises #indyref” is a mystery.

But it raised a question. What opinion, if any, do I – an Englishwoman living in the south of England – have a right to express? The events of the last week have made it very clear that Scottish independence would affect all of the UK. I have no vote in this referendum, but I definitely have an interest in its outcome. It is therefore wrong to suggest, therefore (as some do) that I have no right to comment AT ALL on Scottish independence and its effects. Scottish independence would affect me. Therefore I have a right to express an opinion on it.

I am no constitutional lawyer, but it is clear to me, at any rate, that the UK must continue in some way after Scottish independence. I am a citizen of the United Kingdom, and I have no vote in this referendum. Is my citizenship to be revoked on the say-so of the Scots? Is the country in which I was born and to which I have given my allegiance to be broken up without my agreement? The claim by some that Scottish independence would mean the end of the UK cannot be allowed to stand. Breakup of the UK would need the agreement of ALL its citizens. The very fact that the Scots have been allowed to have their own referendum is a clear indication that the UK would continue in some form after Scottish independence. A “Yes” vote would be secession, not breakup. Comparisons with Czechoslovakia are moot.

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The European leadership certainly seems to understand this. Jose Manuel Barroso, President of the European Commission, observed that Scotland would be “a new country, a new state, coming out of a current member state”. To him, clearly, the UK would remain after independence – diminished, but still standing. Even if it adopted a new name (perhaps “the United Kingdom of England, Wales and Northern Ireland”) it would still be the same country and therefore remain a member of the European Union. He also made it clear, as have other European officials, that an independent Scotland would have to apply for membership of the EU. John Swinney of the SNP described this as “preposterous” and claimed that Scotland had been a member of the EU for forty years. I’m afraid as far as I can see this is simply wrong. The EU recognises the UK as a member state, not its constituent parts. Scotland is only a member of the EU by virtue of its membership of the UK. If it leaves the UK, it is de facto no longer a member of the EU.

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A similar problem arises with Scotland’s claim to “a share” of sterling. Sterling is the currency of the UK, and the Bank of England is the central bank of the UK. If Scotland were to leave the UK, it would leave behind both the currency itself and the institutions that support it. Emotional shouts of “the pound is Scotland’s too” and “the Bank of England was founded by a Scot” don’t change this situation.

The SNP’s proposal to create a “sterling area” similar to the Euro zone, thus enabling Scotland to retain sterling with Bank of England support, has foundered on political opposition in the UK and economic arguments from the Governor of the Bank of Englandand from the UK Treasury. The three main UK political parties have – unusually – presented a united front in opposing currency union with an independent Scotland. Describing this as“ganging up” to “bully” Scots into rejecting independence is perverse. The SNP has to make the case for currency union, not only from Scotland’s perspective but also from the perspective of the rest of the UK. So far, it has failed to do so. Until it comes up with a compelling argument that currency union would be beneficial not only for Scotland but for the rest of the UK, it is is off the table. That doesn’t mean an independent Scotland couldn’t use sterling, and it doesn’t mean that Scotland’s claim on the assets of the Bank of England wouldn’t be honoured. Indeed, it would not be in the UK’s interests to withhold Scotland’s share of the Bank of England’s gold and FX reserves. An independent Scotland’s new central bank would need them.

Personally I think the currency union proposed by the SNP would be bad news not only for Scotland, but also for the rest of the UK. I explained why in this post from two years ago, and John Aziz has reached similar conclusions, as has Martin Wolf of the FT – a formidable opponent. So I think those supporters of “independence” who favour a currency union are mistaken. But more importantly, they do not have the right to force an unwanted currency union on the rest of the UK.

The fact is that Scotland’s self-determination has to be negotiated, and negotiation is a long and delicate process. The outcome of the independence referendum will set the framework within which that negotiation will take place. At present there is considerable discussion about what would have to be negotiated following a “Yes” vote. But there is no discussion about what would have to be negotiated following a “No” vote. And yet, in its way, a “No” response would have as many implications for the future of the UK as a “Yes” vote. Whatever the outcome of this referendum, the UK is set for radical change.

The independence referendum was originally intended to have a third alternative – the so-called “devo-max“, under which Scotland would remain in the UK but would manage its own fiscal affairs. In the event of a “No” vote, the Scottish government would no doubt push for devo-max – indeed this was originally its preferred option.

It would be easy to see devo-max as simply a matter of devolving much more to the Scottish government. But it goes much further than that. It raises questions about the governance of the entire UK. Not only would the West Lothian question have to be resolved, and the hated Barnett Formula revised to take account of Scotland’s new fiscal autonomy, but the whole relationship of the Scottish and Westminster parliaments would need to change. Would Scotland return fewer MPs to Westminster – say the same number as for the European parliament? And how would this affect the balance of power in Westminster? Would Westminster be forced to create regional parliaments in England to prevent a huge imbalance developing? Would more powers have to be devolved to Welsh and Northern Irish assemblies, and even to English regional parliaments or to large cities such as London? In short, would the UK find itself inexorably moving towards a federal model of government?

If so, then there is a strong case for a second referendum in the event of a “No” vote – a referendum in which ALL the people of the UK would decide how they wish to be governed.

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